Twenty years ago, Cherrington, then 30 years old, turned her back on the advertising world to take over as chief executive of the Mental Health Foundation, before establishing the philanthropic online bookseller Good Books and the branding strategy firm String Theory. Today she says she has experienced boards at all levels, from reporting to a board, being on a board, to creating one from scratch.
"That history has led to an obvious exposure to the diversity of capabilities and experience and resources that boards have."
When it came to forming her own board, Cherrington discovered it wasn't as easy as it looked.
She mapped out the expertise she needed around the table and shoulder tapped those who met the description. The result was a group of people she didn't know, who immediately challenged her thinking, which she says was sometimes quite a leveller.
"That for me was a lesson," she says. "Don't just pull in people that you know and like.
"Look for the skills and capability and look for diversity of thinking because ultimately you need that to stay safe."
Cherrington's experience with the Mental Health Foundation left her with what she describes as an "irretrievably formed social conscience".
"I became aware of the need to be accountable for the impacts that you're having internally and externally from an organisational perspective and to really think about the human side as well as the environmental side of doing business and what governance meant.
"I was hugely lucky to have had that sectoral experience.
"It forced a very different way of dealing with people."
Cherrington says her communication skills "went through the roof".
"Because if they don't, you're going to end up in a very troubling situation." When you have a range of opinions and experience in the boardroom, that ability to listen effectively, draw out different viewpoints and really understand the diversity of opportunity or things that need to be considered is what makes the difference, she says.
"It's really easy to get myopic."
Prevailing boardroom thinking tends to be built around the shareholder model, says Cherrington, intent on delivering short-term results through share price or profitability for the benefit of owners, whether that's the owner-operator or institutional investors.
She says the oft-used graph showing the accelerating mortality rate of companies -- a recent Harvard Business Review study revealed US public companies had a one in three chance of being delisted in the next five years, six times higher than 40 years ago -- points not only to an increasingly complex business environment, but to a failure in this strategy of short-term planning.
"If you are looking at this as a longer game and saying: what is it that we are doing that will keep us here in 100 years.
"Let's be fair, a lot of people are setting up a business because they've got their eye on the prize of flicking it off and selling it to investors.
"That is not how you create sustainable, shared value."
Cherrington says boards need to ask how they are creating long-term value for the business and community, while solving real-world problems.
"That doesn't get answered through a model where it is just about creating a way to get some money."
There are different approaches to corporate governance, and an opportunity for boards to learn from each other.
Corporate governance can provide knowledge on accountability and finance but, particularly within Maori governance models, there is a much more far-reaching role of the organisation within the community and the environmental implications of what you do, she says.
"I think there are some excellent conditions and possibilities that we have going on around us but it's going to take a bit of courage.
"First up we've got to get that there's a problem.
"Pike River was a good opportunity to go: drive for profitability was a bad thing.
"It's amazing how the water closes over so quickly and then we get on with our lives."
ABOVE BOARD
• Is your board diverse in experience and backgrounds and regularly engaged in healthy debate?
• Do you operate to a clear principle-driven framework of governance?
• Can you easily describe the culture and values of the business and how those things are maintained?
• Can you easily describe the purpose of the business and the specific and unique value it delivers to its customers?
• Do you meet and know the business' wider community?
• Have you spent any time at the "pumps"?
• Can you describe the businesses strategy?
• Is it a coherent strategy that is active and being enacted across the activities of the business?
• Do you get regular updates of progress towards achieving that strategy through meeting clearly defined goals and objectives?
• Are executives held accountable for that progress?
Dr Jane Cherrington is speaking at the Institute of Directors Leadership Conference, 12-13 April at The Langham, Auckland.
